Dealers using exchanges to convert or mix their coins aren't that smart as exchanges keep every IP and transaction log for ever.

All this information can be used against you, and linked to you in case you have verified your ID in order to make use of that specific exchange.

There are plenty of ways to get your coins converted back and forth without using exchanges, but probably they weren't aware of it. Dumb people.

Since it is still good as fiat,it depends on holder whether he sued it for good or for illegal.

This is also one of the reason why some countries or states are proposing to regulate bitcoin or other digital/cryptocurrencies,that is - to curb the illegal activities online.By regulating,it also like they are going to control on this currencies and possible anonymous transaction could be not possible anymore.

The same as you all who love bitcoin. I hate to admit it but it is true. A lot of organization is making use of it for different kinds of bad things for their own profit. It is sad but we cant do much about it.

Bitcoins are used for illegal activities for sure there are to many people who think that the bitcoin is very save but there are so many criminals using the bitcoin and the main reason why
they are using the bitcoin is only that they cant be traced when they are paying trough the bitcoin

It is a shame that is it is being used for these things, but it is the responsibility of the users to help stop this when we can.  There is no government control over bitcoin and if we can police ourselves, then there would be no need to a government agency to step in and try to control it.  It is difficult to stop at this time, but it is being done and not giving Bitcoin a good name.

Sure bitcoin is being used for illegal activities, as long as it is a currency. But I don't think it will ever be prohibited by governments. Illegal activities are not about bitcoin, it's just a simple rule: where there is money, there will always be something illegal and vice versa.

Thats its one of the uses of money buy ilegal as legal stuffs,thats why there are black market working with fiat and bitcoin,as stated above bitcoin=money soo sure why wouldnt it being used for that kind?Gambling is soo forbiden that Las Vegas has been built for full pleasure,whores and gambling,as they say what happens in Las Vegas stays in Las Vegas.

Yes, bitcoin is being used in different illegal activities like buying drugs and selling drugs. Last year there was a site called "Silk road" where they were selling different kinds of drugs and other illegal stuffs like guns and so on. Currencies are also being used in different illegal activities because there are no payment that can be made other than these, it's either cryptocurrencies or currencies, these two are the only options because in this world there are no such thing like "100% off". There might be a discount but just a little you are still going to pay though.

I don't' think that we should focus on those people who are using it for illegal activities and even fiat is used for the same reason as no one can stop it as everyone is busy in earning their own money.

Every fiat currency or crypto currency was already and are still used to illegal activities, and yes, the media is a joke, they try to said "bitcoin is encouraging people to do ilegal activities" and this kind of media always will give bad reputation to bitcoin.